El Nino hangover hits Colombia coffee output revival

06.10.2016

The recovery in Colombia's coffee sector suffered a setback as output fell, again, last month, with exports declining too.

The country's production of washed arabica coffee fell in September to 1.03m 60kg bags, according to the National Coffee Grower's Federation (Fedecafe).

That represented a 2% drop year on year – a fifth successive month of annual decline, the longest losing streak since 2012.

Exports also dropped by 4% last month, to 1.04m bags, according to the federation.

Colombia is the second-biggest producer, and exporter, of arabica coffee, after Brazil.

'El Nino hangover'

The drop in output reflected a continued setback to Colombia's output from dryness earlier in the year blamed on the El Nino weather pattern, according to Shweta Upadhyaya, analyst at Global Coffee Monitor.

"The fall in production can be attributed to the El Nino, effects of which are being seen on the crop right now," Ms Upadhyaya said.

The output decline follows a long period of recovery in Colombia's coffee output, as trees planted during a renovation drive begun late last decade, in an anti-rust drive, mature and produce beans.

'Not so significant'

Indeed, Carlos Mera, analyst at Rabobank, forecast that the recent setback in output would prove temporary.

The decline of 2% for September, a month when output is typically seasonally low, was "not so significant", Mr Mera told Agrimoney.com, adding that better volumes lay ahead as benefits from the replanting programme continue to feed through.

This month was likely to see a "pick-up" in volumes, which would last for the rest of 2016.

In New York, arabica coffee futures for December stood 2.15 cents higher at 149.60 cents a pound in midday deals.

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